Reform Update: Medicaid expansion crucial to community health centers, experts warn

The decision in some states not to expand Medicaid could have dire consequences for community health centers and the patients they serve, experts warn.

These safety-net organizations served 20.7 million patients in 8,000 medically underserved communities throughout the U.S. in 2012, according to a new study from the Milken Institute School of Public Health at George Washington University. If the current holdout states continue to refuse to expand Medicaid under the Patient Protection and Affordable Care Act, those community health centers would lose out on $569 million in increased revenue in 2014 alone, Milken researchers estimated.

Further, they would have to continue to grapple with caring for an estimated 1.1 million patients—the vast majority of whom are in 11 southern states—who would remain uninsured because they earn less than 138% of the federal poverty level and do not qualify for insurance subsidies under the law.

“Not expanding Medicaid doesn't change the fact that these centers will be seeing more and more uninsured patients and eventually they are going to buckle, or are going to continue to see significant pressure to maintain services,” said Peter Shin, an associate professor of health policy at Milken Institute.

In Tennessee, one of 19 states that did not raise eligibility in 2014, some residents are not receiving care because local community health centers don't have the capacity to treat them, said Kathy Wood-Dobbins, CEO of the Tennessee Primary Care Association.

“The healthcare centers are full,” Dobbins said. “Community health centers are really not able to expand to meet the growing need of patients in their counties, or counties around them.” Medicaid expansion would give the centers needed funding to allow states to build up their infrastructures to care for more patients, Dobbins said.

Uninsured patients who are able to access care at community health centers must pay for services out-of-pocket on a sliding scale, and as a result, may not come in as often as they should for preventive care, said Brian Toomey, CEO of Piedmont Health Services, which manages eight community health centers in North Carolina.

By contrast, community health centers in states that expanded Medicaid face a very different future. In 2014, 2.9 million uninsured patients gained coverage in those expansion states, according to researchers. Increased insurance payments may generate $2.1 billion in revenue in 2014 to help pay for physicians, nurses and patient care, according to the Milken Institute study.

Another significant gap addressed by Medicaid expansion is the new availability of specialty care, diagnostic testing and elective procedures, which community health centers cannot directly provide.

A cancer diagnosis was often a death sentence for the uninsured before Colorado expanded Medicaid, said Dave Myers, CEO of Metro Community Provider Network, a community health center in the Denver metro area.

“We would tell people, 'I'm sorry, you'll just have to go home and have cancer,' and that was the reality you were dealing with,” Myers said. The health center is now able to refer those patients to oncologists.

The increase in federal funding has allowed Clinica Family Health Services, also in Denver, to enhance its integrated-care program, which includes regular dental and behavioral care in addition to primary care, President and CEO Simon Smith said.

As many as 17 states that did not expand Medicaid in the first three months of 2014 still reported growth in Medicaid enrollment, ranging from 0.1% in Texas to 10.1% in Montana, according to an Avalere Health analysis.

The study tracks the so-called “woodwork effect” through which individuals who were previously eligible but not enrolled for Medicaid sign up as a result of increased outreach and awareness around the Affordable Care Act.

In total, these 17 states reported 550,300 new beneficiaries between October and March, representing an average enrollment growth of 2.8%. The growth exceeded 50,000 in four states: Georgia, North Carolina, South Carolina and Tennessee.

Follow Virgil Dickson on Twitter: @MHVDickson